While unemployment numbers remain high, manufacturers can't fill jobs

Aug. 19, 2013

Matt Marano of Madison, a computer numerical control machine operator for E.P. Heller Co., inspects a machine at the Madison-based company, which employs 40 people, 20 of them in manufacturing jobs. / Bob Karp/Staff photographer

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Last month, as 11.5 million Americans remained unemployed, manufacturing companies looked in vain for people to fill 600,000 jobs. The problem: They can’t find employees who can work their machines.

“The No. 1 point of concern among manufacturers that we visit and assess is the inability to find skilled labor,” said Eric Aerts, Morris area account manager for the New Jersey Manufacturing Extension Program. “There’s a tendency to look down on manufacturing jobs, which is a throwback to a time when a person might stand on a production line and just turn a bolt the same way all day long.”

But today, he added, modern factories are, by and large, clean, beautiful places where people do interesting work.

“The type of manufacturing that has been sent offshore is that labor-intensive mundane work. The work that’s been retained here is typically much more challenging to produce.”

Closing the skills gap could do more than help the industry. Some have touted manufacturing as a silver bullet to rebuild the American middle class and the overall economy — the former because the sector pays solid wages, and the latter because of the sector’s much-touted “multiplier effect.”

Salaries and multipliers

Those who enter manufacturing stand to make good money. In New Jersey, the average wage for chemical manufacturing in 2011 was $120,400, according to the state Department of Labor and Workforce Development. For computer and electronic product manufacturing, the average was $85,100, and for machinery manufacturing, $67,200.

Entree to the field is possible with a two-year degree and a certificate or two, according to Robert Lipka, director of customized training solutions at the Center for Business and Technology at County College of Morris.

“With the right skills and some training, you can be making $50,000 fairly quickly in these kinds of jobs and accelerate up to six figures,” he said. “It doesn’t happen overnight, but it’s a path to a solid income in very reputable companies in a high-tech operation.”

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Specifically, the skills gap in New Jersey and Morris County is in mid-level jobs, according to Melanie Willoughby, senior vice president of government affairs for the New Jersey Business and Industry Association.

“You have your engineers at the higher end,” she said. “Then you have your entry-level people who are learning how to become machinists. But there’s also the middle level — the high-tech people who run the machines, read the blueprints, do quality control, and handle the logistics of getting the product out the door. You need a lot of them.”

The multiplier effect of manufacturing is articulated well in “The U.S. Manufacturing Renaissance,” a 2012 report by investment managers Manning & Napier: For every factory job that is added, three to four additional jobs are created in the economy.

“Suppliers, shipping, transportation, material handling, marketing — all of these support services produce other companies,” said John Kennedy, chief operating officer of the New Jersey Manufacturing Extension Program. “If FedEx was shipping nothing, FedEx wouldn’t exist.”

But all this good news amounts to a silver lining, not a silver bullet, according to Manning & Napier, which cautions that the tailwinds the sector is now experiencing may meet potential headwinds in the future that could derail the rebuilding story. These headwinds could include tariffs on imports that spur trade wars that decrease American ability to export; tight money lending standards; high corporate taxes; and a stronger dollar, which could spur American spending abroad, increase imports, and decrease worldwide demand for American products.

Today, though, manufacturing is growing in New Jersey, according to Willoughby.

“It’s growing in certain niches, including precision manufacturing (formerly known as tool and die making) and contract manufacturing,” she said. “It’s been growing in the military market because we have a lot of manufacturers here who build for the military.”

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Prototypes at Picatinny

A case in point is the 100,000-square-foot Army Prototype Integration Facility at Picatinny Arsenal in Rockaway Township, which employs 135 people who design and make prototype munitions for the Army.

“Prototyping isn’t building things by hand one at a time like a Lamborghini or a Ferrari,” said Stephen Luckowski, chief of material manufacturing and the prototype technology division. “When we build things, we’re thinking about mass production. We make sure a design can be produced anywhere within the industrial base of the United States.”

At Picatinny, products are designed using computer-aided design software. The CAD models are imported directly into the software of computer numerical control, or CNC, machines on the floor of the factory.

“That way there’s no information lost between us and them,” said Bryan Anderson, a mechanical engineer in the CAD department who also served in Afghanistan. “There’s very little human error enveloped into the system.”

Workers on the factory floor operate laser, milling, bending and welding machines that are activated by the computer programming. It’s in this environment that 41-year-old Brian Hamilton of Wharton found a career for himself. After graduating high school in 1990, he worked as a landscaper for 15 years before starting work on a degree in mechanical engineering technology at County College of Morris.

Hamilton was hired in 2007 through a CCM work co-op program to do contract work for Jet Industrial Electronics. He wound up at Picatinny, where he now operates several CNC machines in the prototype facility. Recently he finished his degree.

“I love my job. It’s different things every day, except when I’m running production,” Hamilton said. “But the prototype work is all very interesting. I get to use 3-D modeling software and AutoCAD software.

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“My salary is decent. I make about $50,000 a year. As a technician operating the machines, the most I can get up to is about $90,000,” he added. “But if I continue to broaden my horizons with the engineering, I can do better. An engineer can make six figures.”

Engaged to be married, he is now house hunting with his fiancée, who has two children.

There are many initiatives underway to keep and grow manufacturing jobs like Hamilton’s here in New Jersey and to train more workers to do them.

Since 2010, when Gov. Chris Christie took office, the New Jersey Economic Development Authority has invested more than $175 million in financing and incentives to help 16 manufacturers in Morris County alone. The assistance saved 3,514 jobs that were at risk of leaving the state, according to agency spokesperson Erin Gold.

“It’s also expected to leverage more than $465 million in private investment and create nearly 2,260 new jobs and more than 2,065 construction jobs,” she said.

Training

When it comes to training for such jobs, many avenues of opportunity are emerging.

Under the direction of Lipka, the Center for Business and Technology at CCM helps companies recruit and/or train new employees for the workplace in many sectors, including manufacturing. The center worked extensively with Genral Electric’s Aviation’s Electromechanical Actuation Division in Whippany, which recently was sold to TransDigm Group.

“We set up a six-month training program to get their new employees integrated and acclimated to the working environment from basic skill levels right up to advanced training,” Lipka said. “We covered everything from math skills and blueprint reading and some measurement courses to computerized manufacturing processes training. It was a combination of training we did, plus on-the-job training once they got into the GE working environment.”

To engage high school-age students, the New Jersey Business and Industry Association is promoting career and technical high schools, also known as vocational-technical schools, as a path for students coming out of middle school, according to Willoughby.

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“We’re also working to bring mechatronics — courses that combine mechanical and electronics skills — to New Jersey career and technical schools,” she said. “This course of study teaches students the basic skills they need to work for a manufacturer so a company can hire students right out of high school. Mechatronics is very prominent in Pennsylvania.”

ManufactureNJ, one of eight state-funded talent networks, works to educate people about the positives in a manufacturing career. It is hosted by the New Jersey Institute of Technology.

“We want to attract younger people who are, in droves, not choosing this as a career,” said Gale Spak, associate vice president of NJIT’s Division of Continuing Professional Education. “We also are looking to help transition men and women out of work from other sectors in New Jersey to come into this sector.”

Additionally, ManufactureNJ is promoting a stackable credentials and credits system, according to Spak. Currently, individuals can learn manufacturing skills on their own or at community colleges and then earn credentials by taking tests given by the National Association of Manufacturers. The credentials are stackable: the more certification credentials earned, the higher the earning potential.

“The Advanced Manufacturing Talent Network has been working the last two years on a system under which a student who has a credential can have it counted as credits in a college,” Spak said. “Learners can’t earn a whole degree by obtaining industry-vetted credentials. They’ll have to pay the college to take other courses. With stackable credits, though, they can get a degree faster and cheaper.”

A total of 120 long-term-unemployed people, out of work for more than 27 weeks, will be trained to work in fabricated metals under a $2.5 million federal Dislocated Worker National Emergency Grant awarded to New Jersey last month. The money expands a two-year-old pilot program, taught at select community colleges, that to date has resulted in 88 percent of participants landing jobs.

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Some companies, including E.P. Heller Co. in Madison, which makes solid carbide cutting tools, and Odyssey Specialty Vehicles in Wharton, which custom builds emergency vehicles, conduct their own training programs and make the training a feature of employment.

At E.P. Heller, Doug Heller, the vice president of sales, said the people he employs usually don’t know how to read a scale and have never worked on machines.

“Voc-tech schools don’t do this type of training anymore, so we do a lot of training,” he said. “The Fortune 500 companies can pay the best and they have better benefits, but they don’t offer training. Our people learn here. Then they go out and say, ‘I worked for E.P. Heller Co. for five years. I can set up machines. I can read measurements. I can make blueprints.’ ”

Odyssey hires entry-level people who don’t have bad habits and teaches them the “Odyssey Way,” according to Larry Kahan, founder and chief business development officer.

“It’s not unusual for a guy to start sweeping floors or work on one specific thing in a cabinet and then grow into being an electrical tech,” he said. “Or we’ll send him to school for upholstery. Or he’ll be a master cabinet maker. But the cabinet guy doesn’t just make cabinets. He can also weld and do mechanical work. He learns it all here or he comes in with some skills and we expand on them.”

Changes at companies

Howard Wial, professor at the University of Illinois at Chicago and a nonresident senior fellow at the Brookings Institution, adds that manufacturers can make changes to improve their own job vacancies.

“We had such a decline in manufacturing employment in this country between 2000 and 2010 that many manufacturers got out of the habit of recruiting and hiring,” said Wial, author of a paper titled “Locating American Manufacturing.” “They were in the other mode of cutting back. They may just not know how to recruit the workers that they need anymore.”

Many employees who do land manufacturing jobs say they’re happy. For instance, Dennis Failla of Madison, a 41-year-old manager of inventory and quality at E.P. Heller, said he found a whole new work life when he arrived three years ago. Previously, he studied math and science at Montclair State University and then worked as a drafter who used AutoCAD to design items similar to the ones he now makes.

“Before I got here, I never realized the processes they go through in order to manufacture a simple bur,” he said, referring to a rotary file used on castings, medical parts and aircraft to remove material. “I’m a good learner and there is a lot to know. To identify the burs, for example. We make thousands. I know them all by now.”

Constantly learning and embracing new technology is a key to success in manufacturing. Luckowski, of the Army Prototype Integration Facility, said the arsenal already has progressed to making product parts whole, directly from a computer CAD image. This “Star Trek” style replication is known as additive manufacturing, or direct digital manufacturing.